Jelenlegi hely

Living and working in Croatia

Eurofound provides research, data and analysis on a wide range of social and work-related topics. This information is largely comparative, but also offers country-specific information for each of the 28 EU Member States. Most information is available in English but some has been translated to facilitate access at national level.

Eurofound strives to strengthen the ongoing link between its own work and national policy debates and priorities related to quality of life and work. Increasingly important in this context is the Europe 2020 growth and jobs strategy launched in 2010, which has five headline targets, covering employment through to social inclusion and poverty reduction. The strategy is implemented in the context of the European Semester process – the EU's annual cycle of economic policy guidance and surveillance – which ensures that Member States keep their budgetary and economic policies in line with their EU commitments through, in part, National Reform Programmes. These programmes form the basis for the European Commission's proposals for country-specific recommendations (CSRs) for each Member State.

More resources on Croatia

Other country-specific information may be available in certain areas on demand. Please feel free to contact your country contact at Eurofound for this or any other information at information@eurofound.europa.eu

Living in Croatia

Quality of life

Quality of life

EQLS findings show that both life satisfaction and happiness are slightly below the EU28 average in Croatia. Life satisfaction was 6.3 in 2016 compared with the EU28 average of 7.1, and happiness was 6.8 versus the EU28 average of 7.4 (on a scale of 1–10). Optimism about one’s own future stood at 55% in 2016, which was also slightly lower than the EU28 average of 64%.

However, 58% of respondents in Croatia were optimistic about their children’s or grandchildren’s future in 2016, which was almost level with the EU28 average of 57%. Self-reported health in Croatia is also at the same level as the EU28 average, with 24% of respondents in Croatia reporting ‘very good health’ in 2016, matching the EU average.

Difficulties in making ends meet have increased in Croatia in recent years. In 2007, 58% of respondents reported difficulties in making ends meet, whereas in 2016 this share was 71%. This is also higher than the EU28 average of 39% in 2016.

2003

2007

2011

2016

Life satisfaction

Mean (1-10)

6.4

6.8

6.3

Taking all things together on a scale of 1 to 10, how happy would you say you are?

Mean (1-10)

7.0

7.3

6.8

Optimism about own future

Agree & strongly agree

-

-

55%

Optimism about children’s or grandchildren’s future

Agree & strongly agree

-

-

58%

Take part in sports or physical exercise

At least once a week

-

27%

18%

In general, how is your health?

Very good

29%

36%

24%

WHO-5 mental wellbeing index

Mean (1-100)

56

62

57

Making ends meet

With some difficulty, difficulty, and great difficulty

58%

63%

71%

I feel I am free to decide how to live my life

Strongly agree

-

37%

19%

I find it difficult to deal with important problems that come up in my life

Agree & strongly agree

-

-

25%

When things go wrong in my life, it generally takes me a long time to get back to normal

Agree & strongly agree

-

-

23%

Work-life balance

Work-life balance

Based on the EQLS, work–life balance is relatively low in Croatia in comparison to the EU28 average. Out of all Member States, Croatia has the highest share of people experiencing all three work–life balance problems ‘at least several times a month’, as shown below. In 2016, 81% of respondents in Croatia have come home ‘too tired from work to do some of the household jobs which need to be done’ at least several times a month, compared with a much lower EU28 average of 59%. Moreover, 69% of respondents in Croatia said ‘it has been difficult to fulfil family responsibilities because of work’ at least several times a month, again much lower than the EU28 average of 38%. The proportion of those reporting they found it ‘difficult to concentrate at work because of family responsibilities’ at least several times a month reached 52% in Croatia, compared to the respective EU28 average of 19%.

2003

2007

2011

2016

(At least several times a month)

I have come home from work too tired to do some of the household jobs which need to be done

Total

73%

73%

81%

Men

74%

74%

79%

Women

72%

72%

83%

It has been difficult for me to fulfil my family responsibilities because of the amount of time I spend on the job

Total

53%

56%

69%

Men

50%

57%

71%

Women

57%

54%

67%

I have found it difficult to concentrate at work because of my family responsibilities

Total

23%

19%

52%

Men

21%

19%

54%

Women

26%

20%

50%

Quality of society

Quality of society

Perceived tensions between poor and rich have decreased in Croatia in recent years. In 2007, 53% of people reported a lot of tension between poor and rich, but in 2016 this share dropped to 35%, closer to the EU average of 29%. Additionally, perceived tensions between different racial and ethnic groups have remained fairly stable, at 33% of the respondents reporting a lot of tension in 2007 and 30% in 2016. This is below the EU28 average of 41% in 2016.

Only 4% of respondents were involved in unpaid voluntary work at least once a month in Croatia in 2016, one of the lowest shares in the EU28 (Bulgaria has the lowest share of only 2% in 2016). Furthermore, trust in people is relatively low in Croatia in comparison to the EU28 average. On a scale of 1–10, the mean trust score in Croatia was 3.8 in 2016, which is close to Cyprus with the lowest mean trust score of 3.0 and below the EU28 average of 5.2.

2003

2007

2011

2016

Social exclusion index

Mean (1-5)

2.5

2.4

2.3

Trust in people

Mean (1-10)

4.6

4.6

3.8

Involvement in unpaid voluntary work

% "at least once a month"

-

8%

4%

Tension between poor and rich people

% reporting 'a lot of tension'

53%

61%

35%

Tension between different racial and ethnic groups

% reporting 'a lot of tension'

33%

33%

30%

I feel safe when I walk alone after dark

Strongly agree

-

-

33%

Quality of public services

Quality of public services

Quality ratings for seven public services

Note: scale of 1-10, Source: EQLS 2016.

The perceived quality of health services has increased from 5.0 to 6.0 between 2007 and 2016 (on a scale of 1–10). Despite some improvement, this is still below the EU28 average of 6.7 in 2016. Many other indicators of the quality of public services also show positive development in Croatia. For instance, the perceived quality of the state pension system increased from 3.4 in 2007 to 4.5 (out of 10) in 2016. This implies that even though the perceived quality of public services is on average lower in Croatia than in the EU28, it is moving towards the EU average.

2003

2007

2011

2016

Health services

Mean (1-10)

5.0

5.4

6.0

Education system

Mean (1-10)

5.9

6.0

6.1

Public transport

Mean (1-10)

5.6

5.8

5.9

Childcare services

Mean (1-10)

5.5

6.1

6.2

Long-term care services

Mean (1-10)

-

5.2

5.8

Social housing

Mean (1-10)

-

4.3

5.0

State pension system

Mean (1-10)

3.4

3.8

4.5

Working life in Croatia

About

Szerző: Predrag Bejaković and Irena Klemenčić

Institution: Institute of Public Finance

Published on: péntek, július 27, 2018

This profile describes the key characteristics of working life in Croatia. It aims to complement other EurWORK research by providing the relevant background information on the structures, institutions and relevant regulations regarding working life. This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, skills and training, and equality and non-discrimination at work. The profiles are updated annually.

Highlights – Working life in 2018

It was announced in early September 2018 that Croatia would be investing HRK 2.5 billion (approx.. €336 million) in new employment programmes. Under a campaign named ‘Get a job in Croatia!’ (Zaposli se u Hrvatskoj!), the government deployed HRK 1.6 billion on active labour market measures and the remaining HRK 900 million for specialised programmes within the private sector. This campaign was launched to help the unemployed to reintegrate into the labour market, find a job and stay in the country. The government’s aim was to involve the inactive part of the population in order to stimulate competitiveness through training and education. The initiative was based on the premise that linking the education system and the labour market would be key to further development.

€80 million of the €13 billion available from EU funds was allocated to the development of a dual education system. Among the employment measures introduced, the most important targeted support for self-employment, the competitiveness of the labour market and the women’s programme ‘Wish’ (Zaželi). As of February 2019, this programme had already employed 4,000 women in rural areas of Croatia and planned to hire 7,000 more. The project also sought to improve the working potential of disadvantaged women, mitigate their unemployment perspectives and diminish their risk of poverty, while, at the same time, encouraging social inclusion and increasing beneficiaries’ quality of life. By early 2019, 164 contracts had been concluded for the implementation of project activities, through which 3,719 women would be employed as providers of care and support to 17,704 older and vulnerable people in their households.

The Federation of the Independent Trade Unions of Croatia stated that social dialogue was not very well respected or effectively implemented in 2018, particularly in relation to changes in numerous laws and regulations. Instead of being involved in the drafting of various legal changes, social partners were simply invited to prepare their written opinions on the drafts, which were made available on a daily basis via the web-portal e-Savjetovanje. Representatives of the Croatian Employers’ Association praised the government’s efforts to organise meetings to discuss various legal changes within a reasonable time period but deemed that the prepared explanations it offered did not contain enough information about specific measures and that the information sometimes arrived too late for adequate discussion and analysis by members of the Croatian Employers’ Association.

The number of pension beneficiaries in Croatia had grown steadily, from about 656,000 in 1990 to approximately 1.14 million by the end of 2018. Only 19% of pensioners had 40 years of service and fulfilled the legal requirements in terms of age and period of insurance. Thus, the public pay-as-you-go pension system continued to face financial problems. The statutory retirement age in Croatia was due to increase to 67 years by 2033, but the government wanted to make this transitional period shorter.

Background

Background

Economic and labour market context

Between 2012 and 2017, GDP grew by 10.7% in Croatia, above the EU average of 7.4% for the same period. Total unemployment decreased slightly and, at 11.1% in 2017, remains well above the EU average of 7.6% for that year. Youth unemployment decreased by 15.2% in the five years considered and employment figures for this category increased 2.5% during this time. Women employment rates also improved and reached 61.4% in 2017.

Legal context

On 15 July 2014 the Croatian Parliament adopted the new Labour Act (OG 93/14). The Act aims to increase the number of employed people, create a legal framework which enables the employers to develop more flexible business models and to adapt to market demands, while maintaining employee protection.

Regarding social partners’ representation, the Act on Representativeness of Employers’ Associations and Trade Unions was adopted in 2014 (OG 93/14). It stipulates the procedure and criteria for establishing representativeness of higher-level employers' and trade union associations for participation in tripartite bodies on the national level, as well as the procedure and criteria for establishing representativeness of trade unions for collective bargaining.

Industrial relations context

Bipartite social dialogue developed at company level, while branch level bipartite negotiations mostly remained underdeveloped. The reasons for inadequate spread of bipartite (especially branch) social dialogue are a generally weak tradition of social dialogue, low coverage of private sector employees with collective agreements, fragmentation of trade unions, unwillingness of the private sector to accept trade unions as partners and inadequate capacities of trade unions and employers’ associations. There is no uniform system of industrial relations in Croatia, and this has created a quite complicated precondition for establishing social partners’ representativeness. The first system of collective bargaining is the system of bargaining for civil and public servants and employees, whose wages are financed from the central budget; the second system is collective bargaining in public enterprises majority-owned by the State; the third system of collective bargaining is seen in units of local and regional self-government and in public enterprises founded by them; the fourth type of collective bargaining is encountered in the private sector which has a tradition and a system of sectoral collective agreements; while the fifth pattern of collective bargaining consists of in-house collective agreements in the private sector. Employers’ organisation density in terms of employees covered in 2013 was 31% (ECS 2013), while by workers’ organisation in 2013 it was 20% by trade unions and 13% by workers’ council (ESC 2013).

Actors and institutions

Actors and institutions

Trade unions, employers’ organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes the European, national, sectoral, regional (provincial or local) and company levels. This section looks into the main actors and institutions and their role in Croatia.

Public authorities involved in regulating working life

The Service for Social Partnership of the Ministry of Labour and Pension System is the successor of the former Government Office for Social Partnership, later incorporated within the Ministry of Labour and Pension System.

The body responsible for social dialogue and working conditions is the Ministry for Labour and Pension System, but for bipartite social dialogue in their field of activities all bodies of state administration are responsible.

The Service for Social Partnership supports a wide range of activities for the advancement of communication between responsible central and local government institutions, social partners and international organisations to help them achieve their joint and efficient effects in the field of labour, social and economic policy. Social partnership has proven to be the stabiliser of social relationships, model of consultation, information and opinion sharing and the key toward wider social consensus on all the relevant issues.

According to the Labour Inspectorate Act (OG 19/14), the Labour Inspectorate is now operating as a part of the Ministry of Labour and Pension System. The Ministry of Labour and Pension System is responsible for drafting and monitoring regulations on safety at work and suggesting measures and encouraging activities promoting health and safety at work. The Labour Inspection is authorised to initiate administrative procedures and eliminate identified deficiencies, and prohibit employer’s practices which jeopardise the lives and health of the workers.

The Croatian Institute for Health Protection and Safety at Work (CIHPSW) is an independent institution at national level working under the supervision of the Ministry of Health. The main goal of CIHPSW is to develop and disseminate knowledge on sustainable and healthy work. CIHPSW is dedicated to health surveillance and health promotion among Croatian workers, and to the improvement of their quality of life and ability to work.

Representativeness

The Act on the Criteria for Participation in Tripartite Bodies and Representativeness for Collective negotiation (OG 82/12 and 88/12) introduced new criteria for representativeness of the social partners’ organisations for tripartite consultations. For employees, the legislation on representativeness of unions has introduced detailed provisions covering which unions are entitled to conclude collective agreements. The new Act on Representativeness of Employers’ Associations and Trade Unions adopted in 2014 regulates the criteria and procedures for establishing representativeness of employers’ associations and higher level trade unions for their participation in tripartite bodies at the national level. It also sets out criteria and procedures for the representativeness of trade unions for collective bargaining and the entitlements of representative associations/trade unions.

More information on representativeness of the main social partner organisations can be found in Eurofound’s representativeness study of the cross-industry social partners or in Eurofound’s sectoral representativeness studies.

Trade unions

About trade union representation

Freedom of association and the right to organise is set by the Constitution (Article 43 and 60), the Labour Act, ILO Conventions No 98 and 87 and other international treaties to which the Republic of Croatia is a party. All employees, except active military staff, have the right to establish and join trade unions. According to the new Labour Act (OG 93/14), Article 165, workers have the right, according to their own free choice, to establish and join a trade union, subject to only such requirements which may be prescribed by the statute or internal rules of this trade union.

In Croatia, there are no databases and/or reliable sources on the trade union membership. According to Milićević-Pezelj (2013), there were 320 thousand trade union members in Croatia which means coverage of around 17%. Bagić (2014) assessed the workforce covered by collective agreements per sector using the list of applicable collective agreements registered with the Ministry of Labour and Pension System (collective agreements implemented in two or more counties) and collective agreements registered with state administration offices in counties (collective agreements implemented in one county). Out of 570 collective agreements in application, the majority (about 64%) concern the private sector, while the rest are related to national and local government and services (13%) or public enterprises (23%). The coverage ratio is directly proportional to the number of collective agreements. The biggest bargaining coverage was recorded for employees in administration and public services, followed by public enterprises, while coverage was considerably lower in private companies. About 88% of employees in budget-user bodies (both central and local government) have their rights regulated by collective agreements. The rights of around three quarters of employees in public enterprises are regulated by collective agreements compared to only 35% of employees in private companies. Thus, according to Bagić’s estimation total coverage rate by collective agreements in Croatia in 2013 was 52.8%. The coverage is about eight percentage points lower compared to the beginning of the economic crisis in Croatia in 2009, when it was 61%.

Trade union membership and trade union density

2010

2011

2012

2013

2014

2015

Source

Trade union density in terms of active employees

n.a.

n.a.

n.a.

17%

n.a.

n.a.

Milićević Pezelj, 2013

Trade union membership in 1000

n.a.

n.a.

n.a.

320

n.a.

n.a.

Milićević Pezelj, 2013

Main trade union confederations and federations

Long name

Abbreviation

Members

Involved in collective bargaining?

Independent Trade Unions of Croatia (Nezavisni hrvatski sindikati)

NHS/ITUC

100,000 (2015)

Yes

Union of Autonomous Trade Unions of Croatia

(Savez samostalnih sindikata Hrvatske)

SSSH/UATUC

105,000 (2015)

Yes

MATICA Association of Croatian Trade Unions

(Matica hrvatskih sindikata)

Matica

55,000 (2015)

Yes

Croatian Association of Trade Unions

(Hrvatska udruga radnickih sindikata)

HUS

48,000 (2015)

Yes

Source: the author, after consultation with Trade Unions and in line with the findings in Milićević Pezelj, 2013.

There are no new trends regarding development in the past four years, but there was a new Act on Representativeness of Employers’ Associations and Trade Unions from 2014 (OG 93/14). With the new act, the Government wanted the process of representativeness to be based on precise and objective criteria, in order to avoid any possibility of bias or abuse. Regarding trends in membership and representativeness, the public sector’s employees’ share in total membership is on the increase (or at least stable) while membership in trade unions in the private sector is steadily decreasing. Union density is decreasing too (around 5–6% in last five years), but much more slowly than in the 1990s. The decrease is explained by the growth of self-employment; by employment in private firms; and by younger employees being less interested in membership. Many younger employees are on fixed-term contracts and fear unionisation or do not see any benefit from it. Furthermore, traditional industry with many trade unions members in Croatia is disappearing, while the service sector is employing more and more workers who are not particularly interested for the unions. Grgurev and Vukorepa (2015) mention technological progress: unfair competition and failure of individual employers; treating a surplus worker; ‘choking’ of small unions by large unions; mobbing; preventing professional promotion due to union membership; fear of losing work due to union membership and blackmail, as well as intimidation of union members by their superiors. Moreover, many people work on projects for a short period and on web platforms. In some economic sectors, like banking, there is the widespread practice of outsourcing all auxiliary services in the sector as well as digitalisation, and this further reduces membership. Around 6,000 to 10,000 persons work through agencies for temporary employment. These workers are not very concerned about trade unions, while TU organisations do not know how to include them in membership. All confederations compete for members since none of them is specialised in particular sectors of the economy or professions (Samardzija et al, 2017). Fragmentation of the trade union landscape, insufficient development of social dialogue but also inappropriate legislative response have proved to be obstacles to appropriate and rapid development of trade unions and solutions aimed at the flexibilisation of employment relations. Due to fragmentation, trade unions sometimes avoid focusing on building direct relations with employers. Instead, they focus on the state searching for legislative solutions to issues that normally should be addressed at bipartite level (Bagic, 2010), which also discourages membership. Finally, trade unions have not been sufficiently successful in extending their membership base into SMEs and new firms generally. With the aim of attracting new members and strengthening existing membership, trade unions organise laudable education actions like EDUCA, establish female and youth sections and develop new forms of trade union organisation and functioning.

Employers’ organisations

About employers’ representation

Freedom of association and the right to organise is set by the Constitution (Article 43 and 60), Labour Act, ILO Conventions and other international treaties to which the Republic of Croatia is a party. Employers have the right, without any distinction whatsoever, and which may be according to their own free choice, to establish and join an employers' association. Employers may freely decide on their membership in an association and leaving such association. Associations may create federations or other forms of association in order to pursue their interests together at a higher level. Higher level associations enjoy all the rights and freedoms granted to association. They all have the right to freely join federations. The Act on Representativeness (OG 93/14) (Art. 2) defines that a representative employers’ organisation for participation in tripartite bodies at a national level has to have been on the Register of higher-level employers’ associations for at least six months; unite at least 3,000 employers or to have affiliated employers employing at least 100,000 workers; gather at least five employers’ associations operating in different areas; have regional offices in at least four counties; have proper premises as well as other necessary material working conditions; and employ at least five employees full time with permanent employment contracts. Since 1993, there has in fact been only one association of employers, the Croatian Employers' Association – CES (Hrvatska udruga poslodavaca – HUP), which brings together branch and interest employers’ organisations. HUP has slightly less than 6,000 members, employing around 400,000 workers, which is approximately 46% of employees in companies. The numbers of its members and membership density have been stable over the past 10 years. HUP as an employers' confederation unites 30 branch associations. Membership is not compulsory.

*Percentage of employees working in an establishment which is a member of any employer organisation that is involved in collective bargaining.

Main employers’ organisations

According to the Decision on Representativeness of Employers' Associations in Croatia, from July 2007 only the Croatian Employers' Association (CEA) fulfilled the required criteria while the Confederation of Croatian industry and entrepreneurs did not. However, the 2014 Act on representativeness stipulates in Article 2 the requirements of employers’ association representativeness. Thus, currently Croatian Employers’ Association (CEA) is the only employers' representative within the national Social-Economic Council, the highest tripartite social body for social dialogue in Croatia. The CEA has four regional offices, while 29 branch associations of CEA advocate for the specific economic interests of different sectors. The CEA is voluntary, independent and legitimate association with the legitimate right to negotiate in the process of collective bargaining and to sign Collective Agreements. The CEAs’ members may also actively participate in all local and/or regional Economic-Social councils in order to improve the conditions of their businesses.

Main employers’ organisations and confederations

Long name

Abbreviation

Members

Year

Involved in collective bargaining?

Croatian Employers Association

(Hrvatska Udruga poslodavaca)

HUP - CEA

6,000

2015

Yes

Source: Croatian Employers Association Program Rada 2016.

Tripartite and bipartite bodies and concentration

Main tripartite and bipartite bodies

Croatia has established an institutional framework for promoting social dialogue, comprising in particular the tripartite Economic Social Council (ESC) and its working bodies, that serves as an advisory body to the Croatian Government. The Croatian ESC started its work in January 1994 and consists of an equal number of representatives of the government, trade union confederations and employer’s associations. The ESC committees deal with the issues of wage policy, tax system, social policy, employment, education and legislation pertinent to the issues of labour, employment and industry. The tripartite social dialogue that began at national level has since progressed to be developed at regional level by the establishment of regional ESCs at each county level, which comprise a 'county ESC'. The criteria for participation in the regional ESC were the same one as adopted for the national ESC. The proposed social partnership at regional level was designed to engage and support the regional business environment by improving communication and cooperation between the government, regional and local administration, business and labour. There are considerable differences in their levels of activity and effectiveness. At the level of companies, institutions and particular branches and industries, bipartite social dialogue is developed through the activities of the trade unions and employers’ associations who conclude collective agreements and facilitate trade union activities in companies, works councils and supervisory boards. In addition, social partners are represented in working bodies within the Croatian Parliament, National Council for protection at work, National Council for Competitiveness, National committee for monitoring the negotiations with EU, governing boards of the Social Insurance Fund and other public institutions.

Monitor and assess the impact of economic policy and measures of economic and social policy on social stability and development at the county level.

Workplace-level employee representation

According to the Labour Act, trade unions are the only actors entitled to conclude collective agreements in the Republic of Croatia on behalf of workers, whereas on the employers’ side a party to a collective agreement can be an individual employer or employers' association. The right to certain agreements with the employer is also given to works council, but those agreements must not regulate matters related to wages, the duration of working time and other issues for which the Labour Act stipulates that they may be regulated by a collective agreement. In that way, apart from the freedom of association and activity, trade unions are ensured collective bargaining monopoly. Works councils in Croatia are relatively rare and they are mostly strongly influenced by trade unions.

Regulation, composition and competences of the bodies

Regulation

Composition

Competences of the body

Involved in company level collective bargaining?

Thresholds/rules when they need to be/can be set up

Works Council

(Radničko vijeće)

Labour Act (OG 93/14), Participation of workers in decision-making - Works council

(Articles 140-162)

Elected employee representatives (by secret ballot). The number of members of the works council is determined by the number of workers employed: up to 75 workers: 1 representative and 751 to 1000 workers: 9 representatives. For each further 1000 of workers, the number of the members of the works council increases by two.

Safeguards and promotes the interests of workers; monitors compliance with the Labour Act, working regulations, collective agreements and other provisions;

monitors if the employer fulfils his obligations related to the calculation and payment of social security contributions.

An employer who employs at least 20 workers has to set up a work council, with the exception of workers employed at public administration bodies.

Trade union

(Radnički sindikat)

Labour Act (OG 93/14), Part ‘Collective industrial relations

Trade unions and employer’s associations’

Right to associate

(Articles 165-191)

Workers have the right, according to their own free choice, to found and join a trade union, subject to only such requirements which may be prescribed by the articles of association or internal rules of this trade union.

Trade unions decide autonomously on the methods for their representation before an employer.

No regulated thresholds

Workers' representative in the employer’s body

Labour Act (OG 93/14), Article 164

A workers’ representative is a member of the company’s or cooperative’s body that supervises business management – a member of a public institution’s body (governing council or another appropriate body).

The member of the aforementioned body has the same legal position as other appointed members of that body.

No regulated thresholds

Employee representation at establishment level

In the figure, we see a comparison between Croatia and European Union for the people with 'Establishment size : All' when asked 'Official structure of employee representation present at establishment'. For the 'Yes' answer, Croatia's score is lower than the European Union score. For the 'No' answer, Croatia's score is higher than the European Union score. The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Collective bargaining

Collective bargaining

The central concern of employment relations is the collective governance of work and employment. This section looks into collective bargaining in Croatia.

Bargaining system

A Law on Representation (OG 93/14) defined the representativeness criteria for the conclusion of collective agreements in Croatia. If only one union represents an organisation’s employees, then that union must be recognised as the representative union for collective bargaining. This is regardless of the number of union members and the share of employees in union membership. If more than one trade union represents the employees at an organisation, then all these unions must agree which union or unions are the representative ones. The Law stipulates that a collective agreement is valid only if it is signed by the representative trade union, or unions that represent at least 50% of the members of the representative trade union. The agreement on the representativeness has to state the number of members of each representative trade union. If the trade unions cannot agree on the trade union representativeness, then it is decided by the Commission for determining the representativeness. Collective agreements are legally binding. Collective bargaining in Croatia has been and still is decentralised in the private sector and mostly centralised in the public sector. It is still possible to collectively negotiate on every level - that is, on the conclusion of the collective agreement that will apply to employees of a single employer, several employers or an employers' association.

Patterns and features of collective bargaining in private and public sector (civil and public services, public enterprises) differ significantly and we cannot talk about a single and uniform system of collective bargaining with a similar hierarchical structure and dynamics.

Bagić (2014) analysed collective agreements regulating the rights of around 650,000 dependently employed workers in Croatia which, out of a total of about 1,231,000 dependently employed, gives a coverage rate of around 53%. The coverage rate is slightly higher if we take into account only employees in legal entities (excluding employees in crafts and freelancers) and reaches 55%. The coverage is about eight percentage points lower compared to the beginning of the economic crisis in Croatia in 2009, when it was 61%. However, closer inspection reveals that the decline did not come as a result of weakening of collective bargaining; on the contrary, one might even argue that the dynamics and the importance of collective bargaining have since increased.

A particularly negative effect on the overall level of bargaining coverage is the adverse impact of the economic crisis on employment in civil construction and tourism and hospitality, two important sectors with applicable branch collective agreements extended by a minister’s decision to all employees in these sectors. In 2009 the construction sector employed about 100,000 workers, with a share of around 8.3% in the total number of employees, while at the end of 2013 that number fell to about 70,000 and the share shrank to only 6.4%. A similar trend was recorded in the tourism and hospitality industry.

The type of collective bargaining encountered in the private sector is a traditional system of sectoral collective agreements. Such a system has been established only in a small number of activities, with partially different forms of collective bargaining. There are relatively narrow categories of activities in which collective agreements are signed for a definite period in regular cycles, such as private health care practice, humanitarian demining or maritime transportation of freight and passengers. In these activities, as a rule, collective agreements have not been extended by an administrative decision of the minister, and are applied only by employers who are members of the relevant association, meaning that the application of the collective agreement provisions is probably high. Another type of sectoral collective agreements consists of agreements for the construction industry, hotel and catering industry, travel agencies and wood and paper industry, concluded a relatively long time ago for an indefinite period and applied to all employees and employers in these sectors thanks to administrative extension. These agreements are responsible for most of the coverage, although it is questionable how many employees they actually apply to in practice. There are no instruments to control their application at a considerable number of employers. Some of these agreements are very dynamic and up to date, although they have been concluded for an indefinite period, because of regularly signed annexes and additions with which certain provisions of agreements are adjusted to the condition in an appropriate sector, including the regulation of base wage. Others regulate only general issues and rights, but not the basic wage, so the specific issues are addressed through additional in-house agreements (for instance, the collective agreement for catering). As a rule, these agreements do not contain unambiguous mechanisms for harmonising wages with macroeconomic and/or microeconomic indicators.

The next pattern of collective bargaining consists of in-house collective agreements in the private sector. Within this pattern there is also a certain heterogeneity, both in terms of the duration of the bargaining cycle (from one- year agreements to agreements concluded for an indefinite period) and in terms of the content. These agreements are mainly present in large enterprises (with over 250 employees) and to a lesser extent in medium-sized companies (50–250 employees). There are also significant differences between sectors - they have a much greater impact in the sectors of mining and extraction, finance and insurance, and manufacturing. However, unlike agreements for the public sector, these agreements as a rule precisely regulate the level of basic wages, but rarely contain specifically designed mechanisms for harmonisation of the basic wage with macroeconomic and microeconomic indicators. In general, collective agreements in the private sector, as far as other material rights are concerned, tend to imitate in the structure material rights in the public sector (including public enterprises and state and public administration), but often differ in the amount of individual rights. These figures are often somewhat lower, but in successful sectors and enterprises can be often significantly higher. It should be noted that in a number of cases in the private sector, there was a reduction in certain material rights of employees as part of the adjustment of the enterprise and the sector to the effects of the economic crisis.

Finally, it should be noted that there is a significant segment of the private sector, mainly in small and some medium-sized enterprises of the service industry, in which the rights of employees have not been regulated by collective agreements at all. Unfortunately, there are no analyses to show the extent to which this fact has a negative impact on the level of wages or other material rights of these employees. There are no other recent data.

Bargaining coverage by ownership sector (2012)

Employed in legal entities – total employees covered by CBA

Total employed

Coverage

Public administration and services

262,215

297,098

88.3%

Central government

254,706

254,706

100.0%

Local government

7,509

42,392

17.7%

Public enterprises

105,792

141,469

74.8%

Central government owned

80,189

103,482

77.5%

Local government owned

25,603

37,987

67.4%

Private employers

243,251

671,264

36.2%

Total

611,258

1,109,831

55.1%

Source: Bagić. D., 2014.

Bargaining levels

Employers express higher interest in concluding collective agreements at the company level in comparison to collective bargaining at the industry, sectoral or regional levels. This is supported by the fact that the number of collective agreements at the industry, sectoral or regional level in Croatia is very small.

Levels of collective bargaining – 2016

National level (Intersectoral)

Sectoral level

Company level

Wages

Working time

Wages

Working time

Wages

Working time

Principal or dominant level

X

X

Important but not dominant level

X

X

Existing level

Articulation

Croatia is characterised by very weak interlink between different bargaining levels. Most bargaining is at company level, although there are some sectors, like construction and catering, as well as the public sector, where there are sectoral collective agreements – sometimes in addition to the company level deals.

Timing of the bargaining rounds

Bargaining rounds take place throughout the year and there is no specific period of the year or a pattern over the year.

Coordination

Horizontal and vertical coordination is feeble, caused primarily by a generally weak tradition of social dialogue, low coverage of private sector employees with collective agreements, unwillingness of the private sector to accept trade unions as partners and as insufficient capacities of trade unions and employers’ associations. In the context of a grave economic and social situation and alarming unemployment rates, the trade unions have begun to coordinate more effectively in last two or three years, but coordination is still relatively weak among them, across the sectors and various levels.

Extension mechanisms

Extension of the application of a collective agreement is stipulated in the Labour Act (OG 93/14) in the Article 203. The Minister may, at the request of all parties to a collective agreement, extend the application of a collective agreement concluded with an employer’s association or a higher-level employers’ association, to an employer who is not a member of the employer’s association or higher-level employers’ association that is a signatory of this collective agreement. The Minister will agree if there is a public interest for extension of a collective agreement and if the collective agreement was concluded by trade unions which have the highest number of members and an employer’s association which has the highest number of workers, at the level for which it is extended.

Derogation mechanisms

Derogation from minimal standards set by law is stipulated in some of the collective agreements and it is possible to derogate from those collective wage agreements after agreement between the representative company trade union (or national trade union) and the employer, mainly in order to save jobs. By temporary assignment contract (Article 46 of the Labour Act, OG 93/14) there is a possibility to derogate general legal regulation on the remuneration and other working conditions applicable to the assigned workers that may not be lower or less favourable when compared to the remuneration or working conditions applicable to the worker employed with the user undertaking for the performance of the same tasks. It is possible to set less favourable working conditions for assigned workers than for workers employed at a company in a collective agreement concluded between the agency or an association of agencies and trade unions.

Expiry of collective agreements

Extended application of legal rules contained in a collective agreement is stipulated in Article 199 of the Labour Act (OG 93/14). Following the expiry of a collective agreement, the legal rules it contains for the contents and termination of employment contracts shall continue to apply until a new collective agreement is concluded for up to three months after the original expiry date. A collective agreement may stipulate a longer period of extended application of legal rules contained in the collective agreement.

Peace clauses

In principle, there are no peace clauses within collective agreements and it is not used. However, According to the Labour Act (OG 93/14), Article 205 stipulates that: (1) Trade unions shall have the right to call and undertake a strike in order to protect and promote the economic and social interests of their members or on the ground of non-payment of remuneration or compensation, or a part thereof, if they have not been paid by their maturity date(4) A strike may not begin before the conclusion of the mediation procedure, when such a procedure is provided for by this Act, or prior to the completion of other amicable dispute resolution procedures agreed upon by the parties.(5) A solidarity strike may begin even if the mediation procedure has not been conducted, but not before the expiration of two days from the date of commencement of the strike in whose support it is organised.

Article 206 defines disputes in which mediation is mandatory:(1) In case of dispute, which could result in a strike or other form of industrial action, the mediation procedure must be conducted as prescribed by this Act, except when the parties have reached an agreement on an alternative amicable method for its resolution.(2) The mediation referred to in paragraph 1 of this Article shall be conducted by the mediator selected by the parties to a dispute from the list established by the Economic and Social Council or determined by mutual agreement.

Consequences of organisation of a strike or participation in a strike are defined by Article 215:(1) Organisation of a strike or participation in a strike, which is organised in compliance with the law, collective agreement and trade union rules, do not constitute a violation of an employment contract.

Other aspects of working life addressed in collective agreements

As the building sector was particularly hard hit by the economic crisis, the amendments to this collective agreement show how adverse consequences can be lessened. Some collective agreements also address other working conditions such as working time.

Industrial action and disputes

Industrial action and disputes

Legal aspects

The right to strike (štrajk) and or stage a solidarity strike (štrajk solidarnosti) exists on the worker side, while employers may lock workers out only as a response to a strike already in progress. A lockout must not begin until eight days after a strike has begun. The Labour Act (93/14) in Article 205 stipulates that trade unions shall have the right to call and undertake a strike in order to protect and promote the economic and social interests of their members, or because remuneration and compensation has not been paid. In any dispute related to the conclusion, amendment or renewal of a collection agreement, the right to call and stage a strike is held by trade unions which have been determined to be representative for the purposes of collective bargaining.

A strike must be announced to the employer, or to the employers’ association, against which it is directed, whereas a solidarity strike must be announced to the employer on whose premises it is organised. A letter announcing the strike must state the reasons for the strike, the place, date and time of its commencement, as well as the method of its execution. Article 206 defines that in case of a dispute which could result in a strike or other form of industrial action, the mediation procedure must be conducted, except when the parties have reached an agreement on an alternative method for its resolution. Mediation is conducted by an independent mediator selected by the parties to a dispute, chosen either from the list compiled by the Economic and Social Council or by mutual agreement.

Start and termination of the employment relationship

Requirements regarding an employment contract

According to Article 19 of the Labour Act (OG 93/14), it is prohibited to employ a person under 15 (or between 15 and 18 years of age if he/she is still subject to compulsory full-time elementary schooling). When a legal representative authorises the conclusion of an employment contract for a minor (with the exception of a minor who is still subject to compulsory full-time elementary schooling), the minor has legal competence for concluding and terminating such contract and for taking any legal actions.

Dismissal and termination procedures

Article 115 of the Labour Act allows an employer to dismiss workers for certain reasons. These comprise the specific nature of the work, in terms of organisation and technology; the employee’s personal characteristics; misconduct; failure to measure up to the work during the probationary period. When a worker is dismissed because of the changing nature of the work, his or her tenure, age and family circumstances have to be taken into consideration.

Dispute resolution mechanisms

Collective dispute resolution mechanisms

The Labour Act (OG 93/14) in Article 205 stipulates that a strike may not begin before the conclusion of the mediation procedure, when such a procedure is provided for by this Act, or prior to the completion of other amicable dispute resolution procedures agreed upon by the parties. Article 206 defines that in case of dispute which could result in a strike or other form of industrial action, the mediation procedure must be conducted as prescribed by the Labour Act, except when the parties have reached an agreement on an alternative method for its resolution. However, in reality, conciliation and mediation are used as synonyms.

Resolution of disputes by mediation

Mentioned obligatory mediation is conducted by the mediator selected by the parties to a dispute from the list established by the Economic and Social Council or determined by mutual agreement. A decision on the level of mediators’ fees is made by the Minister responsible for labour affairs with a prior opinion from the Economic and Social Council and consent from the Minister of Finance. The Minister shall, alongside a prior opinion of the Economic and Social Council, adopt an ordinance regulating the methods for the selection of mediators, conduct of the mediation procedure and performance of administrative work necessary for this procedure. Article 208 determines the time limit for the completion of the mediation procedure. Unless otherwise agreed by the parties to a dispute, the obligatory mediation provided by the Labour Act must be completed within five days following the submission of information about the dispute to the Economic and Social Council, or to a state administrative office in a county responsible for labour affairs.

Resolution of disputes by arbitration

The Labour Act (OG 93/14) in Articles 210–212 defines the resolution of disputes by arbitration. Parties to a dispute may agree to bring their collective labour dispute before an arbitration body. The appointment of an individual arbiter or an arbitration board and other issues related to the arbitration procedure may be regulated by a collective agreement or by an agreement of the parties made after the dispute has arisen. Issues to be decided by arbitration are defined by Article 211. It stipulates how in their agreement to bring a dispute before an arbitration body, the parties shall delineate the issue to be resolved. The arbitration body may decide only upon the issues brought before it by the parties to a dispute. If a dispute concerns the application of laws and regulations or collective agreement, the arbitration body bases its decision on the appropriate legislation, another regulation or collective agreement. If a dispute concerns the conclusion, amendment or renewal of a collective agreement, the arbitration body bases its decision on equitable grounds. Unless the parties to a dispute specify otherwise in a collective agreement or an agreement to bring a dispute before an arbitration body, an arbitration award must include the reasons for the award. No appeal is permitted against an arbitration award. If a dispute concerns the conclusion, amendment or renewal of a collective agreement, the arbitration award has the legal force and effect of such an agreement.

Individual dispute resolution mechanisms

Article 209 of the Labour Act (OG 93/14) regulates a decision made by the parties and its effects and states that parties may finalise the mediation procedure with an agreement. An agreement reached in the event of dispute related to conclusion, amendment or renewal of a collective agreement has the legal force and effect of a collective agreement. An agreement reached in the event of dispute over remuneration and compensation may be used to agree upon the method and dynamics of payment.

Data from the former Government Office for Social Partnership show that 100 cases were dealt with in 2012 (45 settled or conditionally settled), and 137 in 2013 (70 settled), a significant increase in comparison with the 2011 figures of 100 cases (46 settled). The number of cases and percentage successfully resolved decreased in 2014.

Individual employment relations

Individual employment relations

Individual employment relations are the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over the terms and conditions governing the employment relationship. This section looks into the start and termination of the employment relationship and entitlements and obligations in Croatia.

Start and termination of the employment relationship

Requirements regarding an employment contract

According to Article 19 of the Labour Act (OG 93/14), it is prohibited to employ a person under 15 (or between 15 and 18 years of age if he/she is still subject to compulsory full-time elementary schooling). When a legal representative authorises the conclusion of an employment contract for a minor (with the exception of a minor who is still subject to compulsory full-time elementary schooling), the minor has legal competence for concluding and terminating such contract and for taking any legal actions.

Dismissal and termination procedures

Article 115 of the Labour Act allows an employer to dismiss workers for certain reasons. These comprise the specific nature of the work, in terms of organisation and technology; the employee’s personal characteristics; misconduct; failure to measure up to the work during the probationary period. When a worker is dismissed because of the changing nature of the work, his or her tenure, age and family circumstances have to be taken into consideration.

Entitlements and obligations

Parental, maternity and paternity leave

Statutory leave arrangements, 2017

Maternity leave

Maximum duration

The leave is divided into two parts. The mandatory period, used by pregnant women/mothers, lasts from the 28th day before the expected delivery date (or from the 45th day, upon medical approval) to the 70th day after birth. In cases of poor health or health risks for the mother and child, the pregnant mother is entitled to sick leave before birth for the duration of the risk (‘sick leave due to illness and complications related to pregnancy’).

Reimbursement

If the insurance period condition is fulfilled, the benefit amount is equal to 100% of the benefit base (BB) during the whole period (HRK 3,324 or EUR 443). The minimum benefit amount is HRK 1,663 (50% of BB) (EUR 221.5). If the insurance period condition is not met, the benefit is equal to the minimum amount.

An employed or self-employed parent is entitled to parental leave after the child reaches the age of 6 months, and they may use it until the child turns 8 (for the first and second child). This is a personal right of both parents and they may take it for 8 (for the first and second child) or 30 months (for twins, third and every subsequent child).As a rule, both parents can avail of parental leave, each for 4 or 15 months (depending on the number of children born). But, if this right is used by only one parent, then the leave can last 6 or 30 months. Additional maternity leave may be used from six months after the birth until the child's eighth year and may be used by both parents for an equal duration: eight months for the first and second child. It is to be used by both parents for a duration of 4 or 15 months each, but not at the same time. If used only by one parent, it may last 6 months or 30 months, respectively. The leave may be used in one period or in more parts, twice per year at most, each time for a duration of at least 30 days.

Reimbursement

100% of average earnings, with a ceiling of 120% of the budgetary base rate for the first six months (HRK 3,991.20 or € 5328.16); 70% of the budgetary base rate after the first six months (HRK 2,328.20 or € 310)

Paternity leave in case of multiple births or for different time periods of parental leave

No statutory entitlement.

Sick leave

Calculation of the sickness cash benefit provided by the Croatian Institute of Health Insurance is based on the average net wage in the six months preceding the month of sickness. It is paid in full (100% of the calculation base) when sickness is resulting from the Homeland War, for injury on work, for nursing a sick child under three years of age, for donation of tissues and organs, in case of isolation or complications during pregnancy. In all other instances it amounts to 70% of the calculation base. After six months of continuous sick leave, the amount increases to 80%. It is regulated by the Act on Mandatory Health Insurance (Zakon o obveznom zdravstvenom osiguranju - OG 80/13 and 137/13), the Book of Rules Regarding Longest Duration of Sick Leave Depending on the Type of Disease (Pravilnik o rokovima najduljeg trajanja bolovanja ovisno o vrsti bolesti - OG 153/09), the Book of Rules on Sick Leave Control (Pravilnik o kontroli bolovanja - OG 123/11), The Labour Act (Zakon o radu, 93/14) and Act on Maternity and Parental Benefits (Zakon o rodiljnim i roditeljskim potporama - OG 85/08, 110/08, 34/11, 54/13, 152/14).

Retirement age

Retirement age for men is 65 years, while the retirement age for women in Croatia increased to 61.75 in 2017 from 60.50 in 2012. The legal retirement age for women is rising every year by three months to reach age 65 by 2030. There is a possibility to take early retirement a maximum of five years before official retirement age with a reduction of between 6% and 20.4% in the amount of pension.

Pay

Pay

Pay: For workers, the reward for work and main source of income; for employers, a cost of production and focus of bargaining and legislation. This section looks into minimum wage setting in Croatia and guides the reader to further material on collective wage bargaining.

Nominal wages have increased between 2013 and 2017 in all sectors. The average monthly paid-off net earnings per person in paid employment in legal entities for December 2017 amounted to HRK 5973 (€ 796), which is HRK 237 (€ 32) or 4.3% higher than the net wage in December 2013 (HRK 5556 or € 740). The highest average monthly net earnings per person in paid employment for December 2017 were in the Air transport activity and amounted to HRK 10384 (€ 1385), while in the same month of 2013 it was HRK 9431 (€ 1257). The lowest earnings for December 2017 were in the Manufacture of wearing apparel activity and amounted to HRK 3643 (€ 486), while for December 2013 it was HRK 2951 (€ 393). In the period 2013–2017, the average wage in the public sector was about 25% higher than in the private sector. In the case of state-owned enterprises, the average wage was around 20% higher than in the private sector. The difference in educational attainment is an important determinant of the observed differences in average wages by sectors, so the return on higher education attainment is somewhat higher in the private sector.

Average monthly net earnings per person in paid employment in legal entities, according to NKD 2007 ‒ months, HRK

Ø 2012.

Ø 2013.

Ø 2014.

Ø 2015.

Ø 2016.

Ø 2017

Total

5478

5515

5533

5711

5685

5984

A

Agriculture, forestry and fishing

5020

5050

4963

5113

5169

5326

B

Mining and quarrying

6750

6711

6674

7064

7332

7378

C

Manufacturing

4829

4899

4956

5131

5159

5447

D

Electricity, gas, steam and air conditioning supply

6931

7260

7180

7509

7966

8216

E

Water supply; sewerage, waste management and remediation activities

5304

5446

5389

5457

5565

5750

F

Construction

4564

4643

4689

4881

4675

4961

G

Wholesale and retail trade; repair of motor vehicles and motorcycles

4700

4726

4830

5018

4945

5275

H

Transportation and storage

6163

6303

6237

6438

5960

6189

I

Accommodation and food service activities

4677

4819

4874

5007

4720

5026

J

Information and communication

7709

7759

7733

8052

7602

8026

K

Financial and insurance activities

7821

7870

7892

8119

7892

8339

L

Real estate activities

5730

5020

4840

5330

5481

5755

M

Professional, scientific and technical activities

6962

7093

7081

7362

6323

6723

N

Administrative and support service activities

3504

3510

3534

3695

4024

4301

O

Public administration and defence; compulsory social security

6174

6052

6031

6129

6554

6872

P

Education

5498

5484

5446

5532

6146

6391

Q

Human health and social work activities

6176

6115

6103

6404

6696

7004

R

Arts, entertainment and recreation

5590

5631

5617

5697

5377

5666

S

Other service activities

5505

5676

5749

5936

4847

5229

T

Activities of households as employers; undifferentiated goods – and services – producing activities of households for own use

-

-

-

-

U

Activities of extraterritorial organisations and bodies

-

-

-

-

Average monthly net earnings per person in paid employment in legal entities, according to NKD 2007 ‒ months, euro

Ø 2012.

Ø 2013.

Ø 2014.

Ø 2015.

Ø 2016.

Ø 2017

Total

730

735

738

761

758

798

A

Agriculture, forestry and fishing

669

673

662

682

689

710

B

Mining and quarrying

900

895

890

942

978

984

C

Manufacturing

644

653

661

684

688

726

D

Electricity, gas, steam and air conditioning supply

924

968

957

1001

1062

1095

E

Water supply; sewerage, waste management and remediation activities

707

726

719

728

742

767

F

Construction

609

619

625

651

623

661

G

Wholesale and retail trade; repair of motor vehicles and motorcycles

627

630

644

669

659

703

H

Transportation and storage

822

840

832

858

795

825

I

Accommodation and food service activities

624

643

650

668

629

670

J

Information and communication

1028

1035

1031

1074

1014

1070

K

Financial and insurance activities

1043

1049

1052

1083

1052

1112

L

Real estate activities

764

669

645

711

731

767

M

Professional, scientific and technical activities

928

946

944

982

843

896

N

Administrative and support service activities

467

468

471

493

537

573

O

Public administration and defence; compulsory social security

823

807

804

817

874

916

P

Education

733

731

726

738

819

852

Q

Human health and social work activities

823

815

814

854

893

934

R

Arts, entertainment and recreation

745

751

749

760

717

755

S

Other service activities

734

757

767

791

646

697

T

Activities of households as employers; undifferentiated goods – and services – producing activities of households for own use

-

-

-

-

-

-

U

Activities of extraterritorial organisations and bodies

-

-

-

-

-

-

Average monthly gross earnings per person in paid employment in legal entities, by professional attainment, HRK

Professional attainment

Total

University degree

Non-university degree

Secondary school education

Basic education

Highly skilled

Skilled

Semi-skilled

Unskilled

2013

7926

12812

9201

6480

5146

8345

5676

5067

4454

2014

7951

12652

9141

6495

5070

8313

5819

5220

4491

2015

7978

12581

9163

6476

4985

8158

5782

5316

4597

Average monthly gross earnings per person in paid employment in legal entities, by professional attainment, euro

Professional attainment

Total

University degree

Non-university degree

Secondary school education

Basic education

Highly skilled

Skilled

Semi-skilled

Unskilled

2013

1057

1708

1227

864

686

1113

757

676

594

2014

1060

1687

1219

866

676

1108

776

696

599

2015

1064

1677

1222

863

665

1088

771

709

613

Minimum wages

In the early years of transition, Croatia had a form of minimum wage called ‘the guaranteed wage’. In that period, the government played the leading role and set the minimum wage level each quarter. With certain legislative changes, from 1993 to 1995, the government continued to amend the minimum wage level but did so only occasionally and irregularly at a relatively low level that had no significant influence on the economy. The Labour Law that came into force in 1996 provided a completely new framework for labour market regulation and strengthened the role of collective bargaining. According to the Law, the Government was still allowed, but not compelled, to set a minimum wage in consultation with the social partners. In reality, no minimum wage level was set in 1996 and in 1997. In March 1998, Croatia re-introduced the minimum wage after the conclusion of the National Collective Agreement on the Lowest Wage and it had an immediate extension to uncovered workers and employers. The agreed minimum wage was generally binding. A new stage in the regulation of the minimum wage emerged with the introduction of the Minimum Wage Act on 1 July 2008. Major changes from the previous system include a statutory regulation, defined penalties for non-compliance, a substantial one-off hike in the level of the minimum wage, a sub-minimum rate for specific sectors and the introduction of a specific adjustment formula. In the new system, the minimum wage is defined as a single rate, with a temporary derogation in the form of a sub-minimum rate for specific industries.

Minimum wages

2013

2014

2015

2016

2017

Adult rate*

HRK 2,984.78 (€372.35);

HRK 3,017.61 (€391.90)

HRK 3,029.55

(€ 400)

HRK 3,120 HRK

(€ 407)

HRK 3,276.00

(€ 436.91)

*The amounts are the same also for young workers.

When calculating the minimum wage, the average wage indicator and the GDP rates in the previous year are used. The Croatian Bureau of Statistics uses the following formula.

MW – minimum wage;

ØW – average wage;

GDP – growth rate of the real GDP in the previous year.

This formula has been problematic because the growth rate of real GDP can be either positive or negative. In practice, however, a negative growth rate in real GDP is ignored in the calculation. In February 2013, the government proposed an amendment to the Minimum Wage Act (OG 30/13) to determine the value of the minimum wage in relation to more ‘socially sensitive’ indicators. These are:

the monthly poverty risk threshold for a single-person household;

the coefficient of the total number of inhabitants;

the total number of households;

the coefficient of the total number of economically active workers;

the change in the average index of consumer goods prices.

For 2014 and 2015, the level of the minimum wage was determined by the Government following consultation with social partners. For 2016 and 2017, the level of the minimum wage was determined unilaterally by the government. The minimum wage is not differentiated for different groups of workers.

For more information regarding the level and development of minimum wages, please see:

Collectively agreed pay outcomes

Working time

Working time

Working time: ‘Any period during which the worker is working, at the employer’s disposal and carrying out his activities or duties, in accordance with national laws and/or practice’ (Directive 2003/88/EC). This section briefly summarises regulation and issues regarding working time, overtime, part-time work as well as working time flexibility in Croatia.

Working time regulation

Article 61 of the Labour Act (OG 93/14) says that a normal working week is 40 hours, which may be evenly or unevenly distributed. If hours of labour are unevenly distributed, a working day can be either longer or shorter than is usual. Such patterns are defined by law, collective bargaining, the agreement struck between the works council and the employer and by the individual contract. An employee is not supposed to work in such a pattern for less than three months or longer than a year. In any case, the total number of hours’ work should correspond to those of full-time or part-time employment. In such a case, a maximum of 60 hours can be worked, including overtime, but in any four successive months no more than 48 hours a week can be worked on average, including overtime.

For more detailed information on working time (including annual leave, statutory and collectively agreed working time), please consult:

Overtime regulation

Article 65 of the Labour Act (OG 93/14) defines that in the case of force majeure, an extraordinary increase in the scope of work and in other similar cases of a pressing need, the worker may, at the employer's request, work longer than the full-time or part-time working hours (overtime work). Where the employer, due to the nature of a pressing need, is not in a position to hand over a written request for overtime work before it begins, he is obliged to confirm the oral request in writing within seven days starting from the date overtime work was requested. If the worker works overtime, the total working time of the worker may not exceed 50 hours a week. The overtime work per worker may not exceed 180 hours a year, unless otherwise provided for in a collective agreement, in which case it may not exceed 250 hours a year. Overtime work by minors is prohibited.

Part-time work

Article 62 (OG 93/14) of the Act regulates part-time work, defined as any working time shorter than full-time week. A worker may not combine work at several employers to work more than a full-time week. With the consent of the first employer, a worker can work for up to eight hours a week, but no more than one hundred and eighty hours a year, with another employer. A worker cannot have a second job without informing his full-time employer. When the length of service is important for the exercise of rights arising from employment, part-time work is equated with full-time work. Apart from special derogations, regular pay and other remunerations such as holiday pay and bonuses are paid in proportion to the working time.

Part-time employees as a proportion of all employees fell from 7.0% in 2011 to 5.6% in 2016, according to Eurostat. In comparison with the EU28 average, Croatia has a low share of persons that work part time, and this low share further decreased during the observed period 2011–2016, with a slight increase in 2015. This difference with the EU average is particularly noticeable for women, the share of women in part-time jobs in the EU being more than four times higher than in Croatia.

Persons employed part-time in Croatia and EU28 (% of total employment)

Involuntary part-time

Involuntary part-time workers can be defined as those working part-time because they could not find a full-time job.

Persons employed in involuntary part-time work in the EU28 and Croatia (% of total part-time employment)

2012

2013

2014

2015

2016

2017

Total (EU 28)

28.4

30.0

30.4

29.9

28.5

27.1

Total (Croatia)

22.4

24.5

25.8

26.8

30.8

36.3

Women (EU 28)

24.9

26.4

26.8

26.2

25.0

23.7

Women (Croatia)

18.8

20.6

23.9

19.8

26.7

29.1

Men (EU 28)

41.0

42.4

42.7

42.5

40.1

38.7

Men (Croatia)

26.9

29.1

28.6

36.2

36.5

45.8

Source: Eurostat Labour Force Survey [lfsa_eppgai]- involuntary part-time employment as a percentage of the total part-time employment, by sex and age (20 to 64 years of age)

The share of involuntary part-time employment in the total part-time employment increased in Croatia from 22.4% in 2012 to 36.3% in 2017. While in the period 2012–2015, it was lower than the share for EU28, in 2017 it was significantly higher than the average share for EU28. During the economic crisis that lasted in Croatia almost until 2014, involuntary part-time employment was particularly pronounced in construction and in retail (Butković et all, 2016). In 2017, involuntary part-time employment as percentage of the total part-time employment for female in Croatia is higher than the average share for EU28, but considerably higher for men in Croatia (45.8%) in comparison with the EU average (38.7%).

Night work

The Labour Act (OG 93/14) contains provisions on night work in Articles 69, 70 and 72. Night work means any work performed between the hours of 22.00 and 06.00, and in the agriculture sector between 22.00 and 5.00. In the case of minors working in industry, any work in the period between 19.00 and 07.00. shall be regarded as night work. In the case of minors not working in industry, any work in the period between 20.00 and 06.00 shall be regarded as night work. A night worker is any worker who regularly works at least three hours of his daily working time as a normal course during night time, and any worker who works at least one third of his daily working time during the period of twelve successive months during night time. Normal working hours for night workers may not, in the period of four months, exceed an average of 8 hours in any 24-hour period. Where, based on a danger assessment carried out pursuant to specific provisions on protection at work, the night worker is exposed to special hazards or heavy physical or mental strain, the employer must ensure that such a worker does not work more than 8 hours in any period of 24 hours during which they perform night work.

Night work by minors is prohibited, unless such work is a pressing need in business activities regulated by special legislation and where it may not be performed by adult workers; in such a case, the minor cannot work between midnight and 04.00 nor may he work longer than 8 hours in any period of 24 hours during which they perform night work. The employer must ensure that such work is performed under the surveillance of an adult. In organising night work, the employer is obliged to take special care to adapt the organisation of work to the worker and ensure that safety and health protection is adapted to the nature of night work. The employer is obliged to provide night workers with a health assessment before their assignment and thereafter at regular intervals. If a health assessment establishes that the night worker suffers from health problems connected with the fact that he performs night work, the employer is obliged to ensure that the worker can perform the same job in day work. In cases where the employer is not able to ensure the transfer to day work, he must offer the worker an employment contract for a type of day work to which he is suited and which to the greatest possible extent is comparable to the work previously performed by the worker.

Shift work

The Labour Act (OG 93/14) sets out provisions on shift work in Articles 70 and 71. Shift work means any method of organising work in shifts, whereby workers succeed each other at the same work station according to a certain pattern, which may be continuous or discontinuous. A shift worker is any worker who performs his work in different shifts, working for an employer whose work is organised in shifts, based on patterns of working time, for a period of one week or one month. Where the work is organised in shifts that include night work, a change of shifts shall be ensured to limit the uninterrupted work in a night shift to a maximum of one week. In organising shift work, the employer is obliged to take special care so as to adapt the organisation of work to the worker and ensure that safety and health protection is adapted to the nature of shift work. The employer is obliged to ensure safety and health protection to shift workers that is adapted to the nature of their work, as well as ensuring that the functioning of sufficient protection and prevention services applicable to all other workers are available at any time.

Weekend work

There are no specific provisions regarding weekend work in the Labour Act (OG 93/14). When defining a weekly break, the Labour Act sets out in Article 75 that the worker is entitled to a weekly minimum uninterrupted rest period of 24 hours plus the hours of daily rest and the minor is entitled to a weekly minimum uninterrupted rest period of 48 hours. The rest must be used by the worker on Sundays or the day before or day after Sunday.

Rest and breaks

According to the Labour Act (OG 93/14, Articles 73, 74 and 75), the worker who works at least six hours a day is entitled to a daily period of rest (a break) of a minimum of 30 minutes. The minor who works at least four hours a day is entitled to a daily period of rest (a break) of minimum 30 consecutive minutes. The part-time worker or minor at two or more employers with total daily working hours at all employers of at least 6 or 4.5 hours, is entitled to a break at each employer proportionate to his contracted part-time work. The rest period is counted in working time. The worker is entitled to a minimum daily rest period of 12 consecutive hours per 24-hour period. The employer must ensure that his adult seasonal workers performing work that involve two periods of work split up over the day is entitled to a minimum daily rest period of eight consecutive hours. The worker is entitled to a weekly minimum uninterrupted rest period of 24 hours plus the hours of daily rest. The minor is entitled to a weekly minimum uninterrupted rest period of 48 hours. The rest must be used by the worker on Sundays or the day before or day after Sunday. Where the worker is not in a position to use the rest period as previously mentioned, he must be afforded equivalent periods of compensatory weekly rest right after his working time with no weekly rest, or with a shorter period of rest. As an exception, the shift workers or workers who due to objective reasons or organisation of work cannot use the rest period must be afforded a weekly minimum uninterrupted rest period of 24 hours, without counting the daily rest.

Working time flexibility

Working time flexibility has a number of diverse characteristics in Croatia. Many of the newly-employed have fixed-term contracts. There is a lot of shift-work and weekend-work, and relatively little night and evening work. Fixed-term contracts were on the decline until the start of the crisis in 2009, but after that gained in importance. Flexiwork tends to involve few hours of work all told, since part-time work outside the farm sector is rare. The following table shows that 74% of employers report that none, or fewer than 20%, of their employees can vary the beginnings and endings of their working day according to their personal needs.

Do you have fixed start and finishing time in your work?

In the figure, we see a comparison between Croatia and European Union for the workers with 'Age : All' when asked 'Do you have fixed starting and finishing times in your work?'. For the 'No' answer, Croatia's score is lower than the European Union score. For the 'Yes' answer, Croatia's score is higher than the European Union score. Data is based on question 39d from the sixth European Working Conditions Survey (2015).The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: European Working conditions survey 2015.

Health and well-being

Health and well-being

Maintaining health and well-being should be a high priority for workers and employers alike. Health is an asset closely associated with a person’s quality of life and longevity, as well as their ability to work. A healthy economy depends on a healthy workforce: organisations can experience loss of productivity through the ill-health of their workers. This section looks into psychosocial risks and health and safety in Croatia.

Health and safety at work

In 2014 a new Act on Occupational Safety (OG 71/14) entered into force. The new Act introduces for the first time measures to protect workers from psychosocial risks (stress) and psychophysiological effort at work, with the aim of prevention and education of all stakeholders. The Act sets out the general principles of risk prevention at work and protection of health, rules to eliminate risk factors, procedures of training of workers and procedures of information and consultation of employees and their representative with employers and their authorised persons. The intention is to raise awareness and encourage preventive action not only by employers but also by employees.

After a significant increase in working days lost due to accidents at work in 2011 (an increase of 16.2% on the previous year), the situation improved in 2012 with a fall of almost one-fifth (-18.7%). According to Pap (2013), there is now a steady decrease in the number of accidents per 1,000 employees. It has dropped from 39 in 2009 to around 33 in recent years.

Accidents at work, with four days’ absence or more – working days lost

2010

2011

2012

2013

2014

All accidents

9,356

10,875

8,844

8,925

8,999

Percent change on previous year

-

16.2%

-18.7%

0.9

0.8

Per 1,000 employees

7.9

9.5

7.8

7.2

6.8

Source: Eurostat, [hsw_mi01] and [lfsa_eegaed]

Psychosocial risks

Work intensity, defined as working to tight deadlines at least a quarter of the time, was more present in the EU27 where in 2005 61.8% respondents faced such situation. In the same year in Croatia it was reported by 43.6% responders.

The situation did not change significantly in the EU27 - 62.0% of respondents faced the same problem in 2010 - but the deterioration was very pronounced in Croatia where 60.6% of respondents reported a rise in work intensity in 2010, just 1.4 percentage points less than the EU27. On average, people in Croatia are slightly less exposed to long working hours than people in the EU27 as a whole. In the EU27, 36.3% workers in 2005 and 32.3% in 2010 said they had to work 10 hours or more in a working day at least once or more per month, compared with Croatia (34.8% in 2005; 28.0% in 2010).

The purpose of the Occupational Health and Safety Act (OG 71/14, Article 1(2)) is a systematic improvement of safety and health protection at work, prevention of injuries at work, occupational diseases and other work-related diseases. Article 3 defines stress at work as health and psychological changes which are the result of the accumulating impact of stressors at work over a longer period of time. These may be manifested as physiological, emotional and cognitive reactions and as behavioural changes of the employee.

The general principles of prevention are stipulated in Article 11. The employer is obliged to implement occupational health and safety measures based on the general principles of prevention. These include: risk avoidance, risk assessment, prevention of risks at their source, adjustment of work to the employees in relation to the design of the workplace, the choice of work equipment and the mode of operation and work processes to relieve monotonous work. Other issues include work at a set pace, result-based work in a given period of time (normative work) and other measures to reduce their harmful effect on health. Employers must consider issues such as adaptation to technical progress, replacing hazardous substances or processes with the non-hazardous or less hazardous.

They are also required to develop a consistent comprehensive prevention policy by connecting technology, organisation of work, working conditions, human relationships and the influence of work environment. They must give preference to collective protective measures over individual ones, appropriately train and inform employees, and make all protective equipment available free of charge.

The general obligations of the employer for the organisation and implementation of occupational health and safety are defined by Article 17(7), and the measures, rules, procedures and activities of occupational health and safety of employees exposed to statodynamic, psychophysiological and other exertions are to be regulated by ministerial ordinance. The Ministry of Labour and Pension System say this ordinance has not yet been accepted.

Croatia participates in EU campaigns on stress and psycho-social risks in the working place, and the institution in Croatia responsible for this campaign is The Croatian Institute for Health Protection and Safety at Work (CIHPSW).

Work intensity: Do you have enough time to get the job done?

In the figure, we see a comparison between Croatia and European Union for the workers with 'Age : All' when asked 'Do you have enough time to get the job done?'. For the 'Always or most of the time' answer, Croatia's score is higher than the European Union score. For the 'Rarely or never' answer, Croatia's score is lower than the European Union score. For the 'Sometimes' answer, Croatia's score is lower than the European Union score. Data is based on question 61g from the sixth European Working Conditions Survey (2015).The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

Skills, learning and employability

Skills, learning and employability

Skills are the passport to employment; the better skilled an individual, the more employable they are. Good skills also tend to secure better-quality jobs and better earnings. This section briefly summarises the Croatian system for ensuring skills and employability and looks into the extent of training.

National system for ensuring skills and employability

Knowledge, skills and competencies are essential prerequisites for competitive society, and Croatia is still in all these segments far below average in the EU. One of the main problems of the labour market in Croatia is a lack of qualified human capital and a mismatch of skills and labour market needs. In Croatia an important issue is an insufficient link between the education arena, the economy and employers; not enough attention is given to the estimates of future trends and needs of the labour force. This causes problems in providing education and skills programmes compatible with the skills and occupations sought on the labour market. One of the main reasons for the high incidence of unemployment among young people in Croatia is widespread skill mismatch. In 2014, the Strategy for Education, Science and Technology was drawn up with participation from representatives of social partner organisations in the working groups. It strongly emphasises the importance of better connecting education and training to the labour market, and improving educational outcomes and skills. Special attention is being given to the application of ICT in teaching and learning.

To establish common values, improve employability, develop principles and objectives of all forms of vocational education and training (VET), a national VET curriculum is being developed. Its guiding principles are:

flexibility of vocational education through electivity and modularity;

delaying vocational differentiation to the final grades to avoid prematurely directing students to specific occupations and to increase the flexibility of the future workforce;

ensuring the relevance of VET by respecting the standardised procedure provided by a survey of the labour market needs;

providing general education and key competencies as a basis for further education and lifelong learning;

the gradual introduction of the ‘work based learning’ model in all forms and types of VET;

preparation and implementation of a prediction model based on the analysis of needs, plans and trends in VET sectors at the county, regional and national level;

ensuring the transition from VET education to various forms of higher education through additional educational programs and by removing barriers and ‘dead ends’ in education.

Training

Main government institutions have played an important role in the Croatian labour market and are responsible for training regulation and development. They are the Ministry for Science, Education and Sport; the Ministry for Labour and Pension System; and the Croatian Employment Services.

The Ministry for Science, Education and Sport is responsible for the quality of the Croatian labour force and its training and skills. The reform of the Croatian educational system is still widely debated and many educational programmes still in place were designed a long time ago to meet now outdated needs. There is an urgent need to reform educational and training system in Croatia.

The Ministry for Labour and Pension System is in charge of regulating and governing labour relations, labour markets, relations with trade unions and employers, the policy of the pension insurance system and international cooperation in the field of labour and employment.

The Croatian Employment Service is in charge of the process of mediation in the labour market, providing job placement services, counselling and promoting the adaptability of enterprises facilitating redeployment and restructuring. The service also maintains passive and active labour market policies, facilitates new job creation by participating in local development initiatives and provides capacity support for international cooperation and reforming the labour market in Croatia.

Training: Have you had any on the job training in the past year?

In the figure, we see a comparison between Croatia and European Union for the workers with 'Age : All' when asked 'Have you had on-the-job training in the last 12 months?'. For the 'No' answer, Croatia's score is higher than the European Union score. For the 'Yes' answer, Croatia's score is lower than the European Union score. Data is based on question 65c from the sixth European Working Conditions Survey (2015).The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

Work organisation

Work organisation

Work organisation underpins economic and business development and has important consequences for productivity, innovation and working conditions. Eurofound research finds that some types of work organisation are associated with a better quality of work and employment. Therefore, developing or introducing different forms of work organisation are of particular interest because of the expected effects on productivity, efficiency and competitiveness of companies, as well as on workers’ working conditions. Ongoing research by Eurofound, based on EurWORK, the European Working Conditions Survey and the European Company Survey, monitors developments in work organisation.

For Croatia, the European Company Survey 2013 shows that between 2010 and 2013, 25.8% of establishments with 10 or more employees reported changes in the use of technology, 23.4% introduced changes in ways to coordinate and allocate the work to workers and another 9.4% saw changes in their working time arrangements.

Work organisation: Are you able to choose or change your methods of work?

In the figure, we see a comparison between Croatia and European Union for the workers with 'Age : All' when asked 'Are you able to choose or change your methods of work?'. For the 'No' answer, Croatia's score is higher than the European Union score. For the 'Yes' answer, Croatia's score is lower than the European Union score. Data is based on question 54b from the sixth European Working Conditions Survey (2015).The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

Equality and non-discrimination at work

Equality and non-discrimination at work

The principle of equal treatment requires that all people, and in the context of the workplace all workers, have the right to receive the same treatment, and will not be discriminated against on the basis of criteria such as age, disability, nationality, race and religion.

In Croatia, discrimination is an unjustified and prohibited difference in treatment on the basis of certain characteristics listed in the Anti-discrimination Act (OG 85/08, 112/12), such as race or ethnic origin, skin colour, sex, language or religion. Discriminatory treatment or forms of discrimination according to the Anti-discrimination Act include direct and indirect discrimination, harassment and sexual harassment. To constitute harassment there needs to be a link between such treatment and one of the discrimination grounds as listed in the act. For example, there is discrimination if someone is harassed at their workplace because they are an older person or female. The legislation is monitored and enforced by various institutions and an ombudsman system, which includes a Gender Equality Ombudsperson and Disability Ombudsman.

Equal pay and gender pay gap

According to the Eurostat data, the unadjusted gender pay gap in Croatia increased from 15.5% in 2010, to 17.6% in 2011, and to 18% in 2012. The unadjusted gender wage gap in Croatia is relatively high within the international context and it is 1.2 percentage points higher than average for the EU27 (16.8%). However, a survey conducted by Nestić, Rubil and Tomić (2014) used Labour Force Survey data and concluded that the adjusted gender gap in Croatia had slightly decreased from 17.1% in 2004, to 16.9% in 2008, to 15.9% in 2012. According to the project on the gender pay gap by the Centre for Education, Counselling and Research - CESI (2016), the gender gap is 9.8% (gross) and 9.6% (net).

Quota regulations

In 2014, a new Law on professional rehabilitation and employment of disabled persons came into force. In 2015, a quota for the employment of disabled persons was implemented, setting a mandatory 3% minimum of disabled employees for employers in all sectors with 20 or more employees. There are also two important laws: Ordinance on incentives for the employment of persons with disabilities (Pravilnik o poticajima pri zapošljavanju osoba s invaliditetom, OG 44/14) and Ordinance on Professional Rehabilitation and Centres for Professional Rehabilitation for Persons with Disabilities (Pravilnik o profesionalnoj rehabilitaciji i centrima za profesionalnu rehabilitaciju osoba s invaliditetom, OG 044/14).